Health reform law’s eventual impact on dermatology is unclear; small initial gains maybe offset by potential cuts down the road

By Ruth Carol, contributing writer, January 03, 2011

The true impact of the Patient Protection and Affordable Care Act (PPACA) will not be known for some time as the provisions of the health system reform law are being phased in during the next few years. But some provisions may significantly impact dermatology in the relatively near future.

“Many provisions have a potential to affect the way we practice and treat our patients,” said Marta Van Beek, MD, MPH, chair of the American Academy of Dermatology’s Congressional Policy Committee and associate professor of dermatology at the University of Iowa Hospitals and Clinics. “How they’ll do that, we’re not sure. Some of that will depend on how the provisions are implemented.”

Individual coverage issues

In the meantime, many of the provisions that address individual coverage issues took effect in September 2010. Among them are the inability to rescind existing health insurance coverage or deny coverage for children with pre-existing conditions as well as the elimination of lifetime limits on benefits and mandatory coverage of certain preventive services and immunizations.

“The immediate impact of the law will benefit our patients,” said Dr. Van Beek, who is quick to point out that what benefits patients, benefits dermatologists. “We have all seen patients whose conditions have dramatically worsened because they were unable to obtain health insurance, for example, after a job change.” The law mandates that the waiting period to enroll in a health plan will not exceed 90 days.[pagebreak]

Small business reforms

Other provisions that may have an immediate positive impact on dermatology practices are the small business reforms enacted by the law. Employers who contribute to their employees’ health insurance will receive tax credits for tax years 2010 through 2013. Small businesses with fewer than 25 full-time employees, and average wages of less than $50,000, can receive up to 35 percent of their contribution. Employers with fewer than 10 employees, and average annual wages of less than $25,000, can receive the full credit. (The salaries of physicians with ownership or partnership in the practice do not count toward the average wage.)

By 2014, employers can provide employee health insurance through a Small Business Health Options program to be established by each state. These businesses can receive a tax credit for up to 50 percent of their contribution. The full credit will be available to employers with 10 or fewer employees and average annual wages of less than $25,000. This credit will be available for two years.

Employers with fewer than 50 employees are not required to provide health insurance per the law. Larger businesses, however, will be subject to a penalty if they do not do so beginning in 2014.

“If you’re a dermatologist in a small private practice and you provide health insurance for your employees, these tax credits will certainly benefit you,” Dr. Van Beek said. There are no tax credits for employers with more than 50 employees but the vast majority of dermatologists work in small private practices.

Note that beginning in the 2011 tax year, employers must report the value of their employees’ health care benefits on each employee’s W-2 tax form.[pagebreak]

Physician payment

Dermatologists who practice in states paid at the bottom of the geographic practice cost indexes (GPCI) can expect to see a payment increase thanks to the law. In fact, the higher GPCI will increase average Medicare physician payment rates in 42 states and territories.

The law reinstates a floor of 1.00 on the work GPCI that expired Dec. 31, 2009. For 2010 and 2011, Medicare will increase the practice expense GPCI in all locations that have a practice expense GPCI below 1.00. In 2011, the practice expense GPCI will be increased to 1.00 in North Dakota, Montana, South Dakota, Utah, and Wyoming.

While the immediate impact of the law may be favorable to dermatology practices, the provisions with the most potential to impact dermatology in the future are the establishment of an Independent Payment Advisory Board (IPAB), participation in the Physician Quality Reporting System, formerly known as the Physician Quality Reporting Initiative (PQRI), and rules around the use of electronic health records (EHRs), which passed in the 2009 stimulus bill but will be implemented on a timetable that intersects that of the reform law.

Payment advisory board

The purpose of the IPAB is to slow the growth in national health spending while maintaining or improving quality of care. By 2014, this 15-member board appointed by the president is to submit to Congress advisory reports on matters related to the Medicare program. Beginning in 2015, the IPAB will have the authority to make Medicare cost-reduction recommendations.

It is the fast-track legislative approval process for the IPAB’s recommendations that concerns Jack S. Resneck Jr., MD, chair of the Academy’s Council on Government Affairs, Health Policy and Practice, and associate professor of dermatology and health policy at the University of California, San Francisco School of Medicine. If Congress fails to approve the board’s recommendations for cuts or find alternative reductions to replace them, the IPAB’s recommendations will automatically take effect. Basically, he said, this board will be able to adjust Medicare payment policies with minimal congressional review.

While the IPAB is prohibited from rationing care or changing coverage policies, it could eventually reduce payments for selected procedures that might ultimately affect access, according to Dr. Resneck. As an example, payment rates for Mohs micrographic surgery, skin biopsies, and dermatopathology could be reduced without any acknowledgement of the growing rates of skin cancer that may be responsible for their increased use.

Physicians will be the primary target for potential reductions as hospitals and hospices will not face IPAB scrutiny until 2020, he noted. Furthermore, Dr. Resneck is concerned about the implementation of a new expenditure target for physicians who still face uncertainty under the flawed Sustainable Growth Rate formula.

“The IPAB is a big concern for dermatologists because it usurps the power of Congress to oversee Medicare spending,” Dr. Van Beek added. “It puts that power into a small number of hands.” (A Dermatology World feature in March will discuss the makeup of the IPAB and the issues it may present for the specialty.)[pagebreak]

Quality reporting

Quality reporting is addressed in several of the health reform law’s provisions. For example, results of quality reporting will be included in the resource-based feedback program for physicians participating in the Medicare program and those reports generated by the IPAB. The latter’s annual public reports are to contain standardized information on health care costs, patient access, utilization, and quality of care, allowing for comparison by region, types of services, types of providers, and both private and public payers.

The Secretary of the Department of Health and Human Services (HHS) is required to develop a Physician Compare website (it was scheduled to launch by Jan. 1) slated to include information on physicians participating in Medicare and, in 2013, performance information based on 2012 quality reporting. Meanwhile, physicians who participate in quality reporting are expected to get timely feedback from the Centers for Medicare and Medicaid Services (CMS) by 2012. That same year, the HHS Secretary is expected to develop an episode grouper that combines separate but clinically related items and services into an episode of care for individuals. The HHS Secretary will then use those groupers to provide reports to physicians comparing their patterns of resources to those of similar physicians.

The law calls for the incentive program associated with quality reporting to continue through 2014, which will benefit participating dermatologists. The incentive payment for 2010 was 2 percent, which will drop to 1 percent in 2011. The incentive payment continues to decrease until 2015 when there will be a 1.5 percent penalty levied for eligible professionals who do not participate. In 2016 and beyond, that penalty increases to 2 percent.

Beginning in 2011, physicians will be able to participate in quality reporting through a continuous assessment program, such as the American Board of Dermatology’s Maintenance of Certification-Dermatology (MOC-D) program. Dermatology practices that use this new reporting method between 2011 and 2014 can receive an additional 0.5 percent incentive payment. However, they will be required to participate and complete the continuous assessment program more frequently than they would need to in order to qualify for or maintain board-certification status.[pagebreak]

Currently, the legislative language on the MOC incentives is fairly vague. “I expect more detail to evolve as the regulatory process unfolds,” Dr. Van Beek said. “The AAD has developed a MOC-D Resource Center on the Academy’s website. This resource center provides valuable tools that can lessen the burden for dermatologists to complete their self-assessment for MOC-D and meet the criteria for the 0.5 percent incentive. However, considering the burden of reporting, it makes sense to report for both Medicare and MOC-D to reap both benefits.” Dermatologists can do so through the Academy’s Clinical Performance Assessment Tool, or CPAT, which fulfills component 4 of MOC-D. Users can purchase an additional module for quality reporting.

A significant problem with quality reporting is that there is a paucity of dermatology measures that are approved nationally and accepted by Medicare, despite ongoing efforts to develop more measures, Dr. Van Beek said. To date, dermatologists have been able to report on three melanoma measures developed by the AAD, while primary care physicians have dozens of applicable measures from which to choose.

Moreover, an accurate reflection of the quality of care being provided requires a large number of patient cases, she explained. “Dermatologists treat thousands of different diseases,” she noted. “To come up with a robust number to accurately reflect how we practice is extremely difficult for just one of these diseases.”

Another yet-to-be-addressed issue is how the data included in all of these quality reports will be risk adjusted. “We all see patients who can’t pay for their medications or have significant travel or work obstacles interfering with their ability to see the physician. As a result, their disease often fares worse than for those who can afford to follow-up with their care or who can afford their medication,” Dr. Van Beek said. It’s important that dermatologists are not misrepresented as providing low-quality care when they are actually providing high-quality care, but the patients they are serving are unable to comply with treatment, she said.

“How exactly quality reporting cited in the law will work needs to be sorted out,” Dr. Van Beek concluded.

These provisions, the timetable for their implementation, and the associated penalties for non-compliance are of concern to the medical community, Dr. Resneck noted. This is in large part because CMS has not demonstrated, to date, that it can reliably measure quality or administer such a program. The medical community supports programs that can improve patient care, he said, but the public reporting requirements and payment penalties are on an implementation timeline that exceeds the ability to measure quality of individual dermatologists in a valid way.[pagebreak]

EHR

Although the health reform law does not include specific provisions about the use of an EHR, which was addressed in the 2009 stimulus bill, it does require CMS to integrate quality reporting with the standards for meaningful use of certified EHRs per the American Recovery and Reinvestment Act of 2009. The recently established criteria for meaningful use require the EHR to be certified through the Office of the National Coordinator and to provide electronic exchange of health information. Additionally, dermatologists must submit clinical quality measures and potentially other measures yet to be defined. If they do so, dermatology practices can be reimbursed up to $44,000 over the course of five years for adopting an EHR, provided they have at least $24,000 in Medicare allowed charges per year. The incentive payments run until 2015, when penalties for not using an EHR will begin.

The problem is that EHRs remain a significant obstacle for dermatologists. “The rapidity with which we see patients and the cadence of our practice doesn’t work well with many existing EHRs,” Dr. Van Beek said. “Many providers do a lot of diagramming in the paper records and many EHRs can’t mimic that in real time.”

Additionally, the use of EHRs, which involve a considerable upfront expense, initially decreases efficiency, she noted. In the long run, it is supposed to improve efficiency. “I am not sure that will be the case in dermatology,” Dr. Van Beek said.

Fraud and abuse

The health system reform law includes a fraud and abuse section which changes the threshold for determining cases of fraud by allowing the punishment of violations whether they were intentional or not. Consequently, an individual who commits fraud or abuse, regardless of his or her knowledge of the law, would now meet the statute’s intent requirement. “It’s no longer necessary to prove that someone intended to violate the statute, putting people who make honest mistakes in jeopardy,” Dr. Van Beek said.

With regard to self-referral, physicians who refer their patients for magnetic resonance imaging, computed tomography, or positron emission tomography within their own practice are now required to inform the patients that they may obtain the services elsewhere. The physician must provide a written list of alternative suppliers in the area, as well. This provision has the potential to impact dermatologists who are part of a multi-specialty practice that owns its own imaging equipment. While a recently developed protocol allows providers to self-disclose an actual or potential violation, which may result in a reduced penalty, the decision to do so should be made in consultation with an attorney who specializes in health care law.

Meanwhile, it is unclear how the new requirements will affect common dermatology referral situations, such as referring patients for phototherapy within one’s practice or reading pathology; the way the regulations are written will determine their impact. Indeed, “There are a lot of provisions described in the law that have not yet been implemented,” Dr. Van Beek noted. “How they will be implemented has yet to be decided.”

For more details about the provisions in the Patient Protection and Affordable Care Act, visit the AAD’s Health System Reform Resource Center. Detailed coverage of individual provisions of the law and their impact on dermatologists will appear in future issues of Dermatology World. [pagebreak]

CMS administrator sets 'triple aim'

Better quality of care, a more organized health system, and lower per capita costs are what the Centers for Medicare and Medicaid Services (CMS) should be focusing on, according to the agency’s recently appointed administrator, Donald M. Berwick, M.D., M.P.P.

Speaking at a conference hosted by America’s Health Insurance Plans on Sept. 13, his first public address since President Obama appointed him this past July, Dr. Berwick elaborated on what he called his “Triple Aim” plan. Better care, he said, could be achieved by focusing on safety, effectiveness, patient-centeredness, timeliness, efficiency, and equity. Better health for populations could be achieved by addressing underlying causes such as poor nutrition, physical inactivity, substance abuse, unwise behavioral choices, violence, and economic disparities. Per capita costs could be reduced by eliminating “waste and needless hassles.”

Dr. Berwick noted that the Patient Protection and Affordable Care Act was the most significant health care legislation since Medicare and Medicaid were created.

Dr. Berwick’s appointment was somewhat controversial because he was appointed while Congress was on a week-long break, side-stepping the need for Senate approval. There was speculation that this was done because Dr. Berwick would not pass the confirmation process as critics would have taken him to task for public comments he has made regarding health care rationing and praise of the British health system. As a recess appointee, Dr. Berwick’s appointment will expire at the end of the next session of Congress, which comes at the end of 2011, unless he is confirmed through the traditional nominating process.

“One advantage is that Dr. Berwick is a physician, so hopefully he remains cognizant of the challenges of daily practice,” noted Marta Van Beek, M.D., M.P.H., chair of the American Academy of Dermatology’s Congressional Policy Committee. “Time will tell what he will do with this position. I have heard that the people with whom he worked previously think highly of him.”

Prior to assuming leadership of CMS, Dr. Berwick was president and chief executive officer of the Institute for Healthcare Improvement, clinical professor of pediatrics and health care policy at the Harvard Medical School, and professor of health policy and management at the Harvard School of Public Health. He is also a pediatrician, adjunct staff in the department of medicine at Boston’s Children’s Hospital, and a consultant in pediatrics at Massachusetts General Hospital.

Dr. Berwick has served as chair of the National Advisory Council of the Agency for Healthcare Research and Quality, and as an elected member of the Institute of Medicine (IOM). He also served on the IOM’s governing council from 2002 to 2007. In 1997 and 1998, President Clinton appointed him to serve on the Advisory Commission on Consumer Protection and Quality in the Healthcare Industry.

A graduate of Harvard College, Dr. Berwick holds a Master in Public Policy degree from the John F. Kennedy School of Government. He received his medical degree from Harvard Medical School.

A significant problem with quality reporting is that there is a paucity of dermatology measures that are approved nationally and accepted by Medicare, despite ongoing efforts to develop more measures.

Lawmaking process offered opportunities, challenges for AADA

During the health reform debate, the American Academy of Dermatology Association (AADA) spoke up vociferously on behalf of those provisions it supported and against those it opposed. The eventual reconciliation process used for passage and the lack of a conference committee between the House and Senate, however, limited the opportunity to work on several remaining concerns.

“The AADA was at the table from the beginning and made its positions well known to policymakers,” said Jack S. Resneck Jr., M.D., chair of the Academy’s Council on Government Affairs, Health Policy and Practice. “Working with the rest of medicine, we were able to achieve some goals and to secure many changes, but several provisions that originated from the Senate bill and survived despite House opposition continue to be primary concerns for the Academy.” These include the Independent Payment Advisory Board, public release and tying payments to quality measures, and the lack of meaningful liability reform.

“There were a lot of people at the table,” noted Marta Van Beek, M.D., M.P.H., chair of the Academy’s Congressional Policy Committee. “There weren’t just medical professionals; there were health insurance companies, medical device companies, hospitals, nursing homes, and ancillary providers. There were conflicting interests among those at the table, so it was extremely important that dermatology remained engaged and made our preferences known. Some provisions are very good for our patients, but some troubling things survived due to the interests of others at the table.”

With the legislation passed, the efforts of Academy staff and volunteers turn to focusing on how it will be implemented. “The AADA will be there to influence the regulatory process, seek changes to the legislation where appropriate, and help members manage the challenges as well as take advantage of any opportunities that exist,” Dr. Resneck said, including financial incentives for quality reporting and initiatives for small businesses.

Better quality of care, a more organized health system, and lower per capita costs are what the Centers for Medicare and Medicaid Services (CMS) should be focusing on, according to the agency’s recently appointed administrator, Donald M. Berwick, M.D., M.P.P.

Speaking at a conference hosted by America’s Health Insurance Plans on Sept. 13, his first public address since President Obama appointed him this past July, Dr. Berwick elaborated on what he called his “Triple Aim” plan. Better care, he said, could be achieved by focusing on safety, effectiveness, patient-centeredness, timeliness, efficiency, and equity. Better health for populations could be achieved by addressing underlying causes such as poor nutrition, physical inactivity, substance abuse, unwise behavioral choices, violence, and economic disparities. Per capita costs could be reduced by eliminating “waste and needless hassles.”

Dr. Berwick noted that the Patient Protection and Affordable Care Act was the most significant health care legislation since Medicare and Medicaid were created.

Dr. Berwick’s appointment was somewhat controversial because he was appointed while Congress was on a week-long break, side-stepping the need for Senate approval. There was speculation that this was done because Dr. Berwick would not pass the confirmation process as critics would have taken him to task for public comments he has made regarding health care rationing and praise of the British health system. As a recess appointee, Dr. Berwick’s appointment will expire at the end of the next session of Congress, which comes at the end of 2011, unless he is confirmed through the traditional nominating process.

“One advantage is that Dr. Berwick is a physician, so hopefully he remains cognizant of the challenges of daily practice,” noted Marta Van Beek, M.D., M.P.H., chair of the American Academy of Dermatology’s Congressional Policy Committee. “Time will tell what he will do with this position. I have heard that the people with whom he worked previously think highly of him.”

Prior to assuming leadership of CMS, Dr. Berwick was president and chief executive officer of the Institute for Healthcare Improvement, clinical professor of pediatrics and health care policy at the Harvard Medical School, and professor of health policy and management at the Harvard School of Public Health. He is also a pediatrician, adjunct staff in the department of medicine at Boston’s Children’s Hospital, and a consultant in pediatrics at Massachusetts General Hospital.

Dr. Berwick has served as chair of the National Advisory Council of the Agency for Healthcare Research and Quality, and as an elected member of the Institute of Medicine (IOM). He also served on the IOM’s governing council from 2002 to 2007. In 1997 and 1998, President Clinton appointed him to serve on the Advisory Commission on Consumer Protection and Quality in the Healthcare Industry.

A graduate of Harvard College, Dr. Berwick holds a Master in Public Policy degree from the John F. Kennedy School of Government. He received his medical degree from Harvard Medical School.

A significant problem with quality reporting is that there is a paucity of dermatology measures that are approved nationally and accepted by Medicare, despite ongoing efforts to develop more measures.

During the health reform debate, the American Academy of Dermatology Association (AADA) spoke up vociferously on behalf of those provisions it supported and against those it opposed. The eventual reconciliation process used for passage and the lack of a conference committee between the House and Senate, however, limited the opportunity to work on several remaining concerns.

“The AADA was at the table from the beginning and made its positions well known to policymakers,” said Jack S. Resneck Jr., M.D., chair of the Academy’s Council on Government Affairs, Health Policy and Practice. “Working with the rest of medicine, we were able to achieve some goals and to secure many changes, but several provisions that originated from the Senate bill and survived despite House opposition continue to be primary concerns for the Academy.” These include the Independent Payment Advisory Board, public release and tying payments to quality measures, and the lack of meaningful liability reform.

“There were a lot of people at the table,” noted Marta Van Beek, M.D., M.P.H., chair of the Academy’s Congressional Policy Committee. “There weren’t just medical professionals; there were health insurance companies, medical device companies, hospitals, nursing homes, and ancillary providers. There were conflicting interests among those at the table, so it was extremely important that dermatology remained engaged and made our preferences known. Some provisions are very good for our patients, but some troubling things survived due to the interests of others at the table.”

With the legislation passed, the efforts of Academy staff and volunteers turn to focusing on how it will be implemented. “The AADA will be there to influence the regulatory process, seek changes to the legislation where appropriate, and help members manage the challenges as well as take advantage of any opportunities that exist,” Dr. Resneck said, including financial incentives for quality reporting and initiatives for small businesses.